By Ray Birch
ARLINGTON, Va.—A final risk-based capital rule is likely this year, but analysts say whether that happens or not depends largely on the number of comments, how much work NCUA has to do to address the feedback and if Congress intervenes.
NAFCU SVP/General Counsel Carrie Hunt reminded that NCUA has stated that the final rule will be issued at the end of 2015 or early in 2016.
“I think given the weightiness of this issue, the controversy surrounding whether or not credit unions need this rule or not, and interest from Capitol Hill, there is a good chance this final rule will not be released by the end of year.”
Carefully Evaluate Impact
What’s most important for credit unions, stated Hunt, is to realize this proposal is new, carefully evaluate how it impacts their business model and send in their comments.
“I think it’s similar to the previous proposal,” explained Hunt. “We are in an open comment period and it is important for credit unions to weigh in. This rule is so different than the first one. It’s a fresh proposal and it could impact a credit union’s business in ways that the first rule did not.”
Hunt emphasized that NAFCU will be speaking regularly with legislators to apprise Capitol Hill about the impact the second proposal will have on CUs and that some additional changes to the Federal Credit Union Act are the true solution.
Rule More Likely In 2015
CUNA Deputy General Counsel Mary Dunn believes chances are greater for the rule to be out by the end of the year than in 2016.
“That is a very good likelihood,” she said. “You have heard the strong support of the proposal from two of the board members and substantial changes to the rule have already been made.”
Those changes, Dunn believes, will lead to much less work for NCUA the second time around, when reviewing comment letters and making final adjustments.
“The nature of any changes that would be made going forward are not likely to be of the scope and nature of the changes that were made the first time, and therefore much less work for the agency,” said Dunn. “Also, it is unclear how many credit unions will feel they need to comment on the newest proposal.”